Bangladesh’s liquefied petroleum gas (LPG) market is facing mounting pressure as global supply disruptions and rising freight costs threaten to squeeze availability from May, even though supply remains stable for now.
At the consumer level, the strain is already visible. A 12 kg LPG cylinder is being sold at Tk 200 to Tk 700 above the government-fixed rate, depending on location, reflecting a widening gap between regulated prices and market realities.
Imports rise, but retail prices stay high
Despite a notable increase in imports in February and March compared to the previous year, the benefit has yet to reach consumers. Market operators say higher international costs and logistical disruptions are being passed down the supply chain.
Industry insiders note that while supply remains adequate in April, importers are racing to secure shipments to avoid a potential shortfall in the coming months.
Middle East tensions disrupt supply chain
A major concern stems from the ongoing Middle East conflict, particularly the impact of the Iran war on LPG production and exports.
Bangladesh relies heavily on Middle Eastern sources for LPG imports. However, damage to production plants and disruptions to shipping routes have reduced supply availability. At the same time, freight costs have surged dramatically, rising from around $120 per tonne to over $450 per tonne in recent weeks.
Captain Mainul Ahsan, Executive Director of BM Energy, said that although a shipment was secured from Oman in March, supply contracts are already under strain.
“We have an agreement to import 20,000 tonnes per month, but suppliers have indicated they may only deliver 6,000 tonnes in May,” he said, warning of a potential disruption in the supply chain.
Demand continues to grow
LPG demand in Bangladesh has been rising steadily due to the limited natural gas supply through pipelines. The fuel is widely used in households and is gaining traction in transport and industrial sectors.
Annual demand currently stands at around 1.5 to 1.7 million tonnes. Of this, only about 2.5 per cent is met from domestic sources, with the rest imported by private operators.
In the 2024-25 fiscal year, total LPG supply, including imports and domestic production, reached approximately 1.75 tonnes. However, imports declined in calendar year 2025 compared to 2024, falling from 1.61 million tonnes to 1.47 million tonnes.
Monthly data also shows volatility. Imports dropped in late 2025 but rebounded sharply in early 2026, with around 3,82,000 tonnes imported in February and March combined – an increase of roughly 25 per cent year-on-year.
Port activity signals short-term stability
Operations at Chattogram port indicate that supply remains steady for now. Several LPG shipments have recently arrived or are in the pipeline, including cargoes from Malaysia, with more expected in mid-April.
These arrivals are expected to support market stability through the end of the month.
Price pressures mount
Global price trends are adding to domestic challenges. Saudi Aramco has increased its Contract Price (CP) for LPG by over 44 per cent in April compared to March. In response, the Bangladesh Energy Regulatory Commission (BERC) raised the official price of a 12 kg cylinder by Tk 387 to Tk 1,728.
However, retail prices continue to exceed the regulated rate, currently ranging between Tk 1,850 and Tk 2,000.
Possible mid-month price adjustment
Regulators are now considering more frequent price revisions to reflect volatile global conditions.
BERC officials say they are reviewing data on increased freight costs and may adjust prices mid-month instead of following the usual monthly schedule. A final decision will be based on a detailed assessment of international pricing and logistics.
Industry urges calm, seeks alternatives
The LPG Operators Association of Bangladesh maintains that there is no immediate cause for panic.
Association President Amirul Haque said imports from alternative sources outside the Middle East are being explored to stabilise supply. He also expressed hope that a ceasefire in the region could ease pressure on prices.
Still, with supply contracts tightening and costs rising, industry players warn that the real test for Bangladesh’s LPG market will come in May.